Billing and payment trends: Are your customers shifting preferences?

The ATM industry has been hearing rumors since the start of the pandemic that more and more consumers are transitioning to digital payments for goods and services. Even monthly bills such as rent, car insurance and electricity are supposedly being paid digitally.

But is this transitioning a rumor or is it fact? According to a ACI Worldwide study it isn't a rumor.

"The percentage of consumers paying at least some of their bills through automated recurring payments has increased from 55.4% in 2019 to 62% in 2020," Sanjay Gupta, ACI executive vice president, told ATM marketplace in an interview.

Those figures come from the 2020 ACI Speedpay Pulse study which examines how billing and payment trends and consumer preferences continue to evolve each year. It also tracks how people choose to pay bills and why they make those decisions. ATM Marketplace asked Gupta to provide deeper insight on the study and findings.

Q: Were you surprised by some of the findings in the study?

A: The survey identified that, over the last year, nearly 70% of consumers preferred to make one-time bill payments digitally, through websites or mobile apps. However, 57% have made a one-time bill payment in person and 38% through the mail, so this shines a light on a major opportunity for billers to either bring consumers the payment channels they want, if they aren't already, or to better communicate and promote the digital options they're already providing.

Q: Do consumers have a preference to how they receive statements?

A:The survey showed 61% of consumers are receiving both paper and digital billing statements, and billers have historically offered both paper and digital statement options in an effort to drive customer satisfaction. However, only 27% of consumers actually prefer a combination of paper and digital statements — almost half 48%, prefer digital statements only, so companies are paying twice to send the same statement to the same customer, even though it doesn't match their preference. Encouraging consumers to opt in to receive only digital statements may help billers eliminate the option to receive paper statements and save related costs.

Q: How did you obtain this data?

A: The data was garnered from a consumer billing and payment trends research study conducted by ACI Worldwide. Each data set includes responses from a survey of at least 3,000 unique respondents, and there's no repeat participation within a one-year period. Each survey sample is U.S. Census-balanced among adults age 18 and older, who are responsible for submitting payments for at least two of their household's monthly bills.

Q: Your study shows the majority of consumers prefer digital payment options — what is this in relation to? For example, last year's numbers? Or pre-COVID-19 numbers?

A: According to our 2020 study, which was conducted between late March and early April, 67% of consumers prefer using websites or mobile apps to make one-time bill payments and this was a slight increase from nearly 63% in 2019. It's very possible that the COVID-19 pandemic is driving the increase in preference, with consumers having spent more time indoors, making digital payments a convenient — and often necessary — method of payment. However, we anticipate that consumers who preferred more traditional payment options pre-COVID might make the move toward digital during the pandemic for convenience, and are likely to see the benefits of permanently using these options.

Q: In the study you say that one in four consumers have increased their usage of a biller's website to pay bills — does the studyindicate why did they made this transition?

A:More than ever before, consumers are beginning to realize the benefits — including convenience, speed and simplicity — of making bill payments through more digital channels like billers' websites. This is also beneficial from the biller's point of view as it gives them the opportunity to "own" the customer relationship more than if these consumers were paying bills through their bank, for example. When customers pay their bills directly through a biller's website, billers can better engage with their customers, serve up personalized upgrades or special offers and deliver targeted marketing messages. Overall, it creates an integrated and less confusing customer experience.

Q: How can billers make it easier for consumers to manage their accounts and pay their bills?

A: Given the preferences of today's consumers, it's no longer a choice to offer digital and mobile billing and payment options — it's essential. For billers that have yet to put an omnichannel payments strategy in place, this is the most immediate and necessary first step in making things easier for consumers and providing a more seamless payments experience. And for those billers that might be offering digital options but are not yet seeing widespread customer adoption, they should consider regularly educating and reminding their customers of the various bill payment options available to them and the benefits of each. As COVID-19 continues to drive digital payments, partnering with providers that can help deliver a digital, more seamless payments experience is key.

Q: What is truly driving this transition to digital payments? Do you think consumers could go back to paper billing or are they getting too comfortable now with digital?

A:Digital transformation has swept almost every industry, and consumers are getting accustomed to faster and more digital experiences across every touchpoint on their journey with the businesses they interact with. In fact, for those consumers who prefer digital payment options, their most-cited reasons include convenience, which is 50%, speed which is 48%, and simplicity, which is 43%. While COVID might be the catalyst for an increased preference for digital payments, consumers have already seen the value and intend to continue making the transition. When asked about their anticipated usage of various channels in the next 12 months, most consumers say they will not use in-person payment options in the future, and nearly half say they will not use mail. In contrast, approximately 3 in 10 consumers expect to increase their usage of billers' websites, banks' websites and mobile app channels.

Q: If COVID-19 hadn't been such an issue, do you think the transition of customers to pay bills online would have occurred?

A:Perhaps not at this pace, but absolutely. As our world gets more digital, customers are searching for faster and more real-time experiences with the brands they interact with and support. Additionally, as some are becoming more environmentally conscious, they are seeking out bill payment options that are paperless and eco-friendly. Online bill payment meets the needs of those consumers seeking convenience and positive environmental impact, and we anticipate this trend will continue.

Q: What do you think the financial industry will look like a year from now in terms of customer payments?

A: As everyone is seeking faster and more convenient payment options, billers and the financial industry should be setting their sights on the prospect of real-time payments to drive innovation, efficiency and customer satisfaction. Additionally, alternative payment methods, like Venmo or Zelle, are an evolving trend to watch in terms of bill payments, especially with two in five consumers saying they would consider paying a bill with an alternative payment method.

Q: What are the implications your study could have on payments professionals and the financial industry?

A: Our hope is that payment professionals and the financial industry at large can use the data from this study to better understand their customers and plan technology and service investments accordingly with the ultimate goal of providing a better, more seamless payment experience.

Q: Were there any additional findings in the study the financial industry should take note of?

A: The report showed that, of those consumers who prefer to make one-time bill payments by credit card, more than two in three consumers do so because they want to earn points or rewards. This number increased from 66% during the same period in 2019 to 69% this year. The financial industry should take note because while consumers are looking to extract additional value out of their payments by earning points or rewards, this results in higher costs for the biller to accept the payment.